Title:
Putting Buddhism to Work: A New Approach to Management and Business

Author:
Shinichi Inoue

Publisher:
Kodansha International Ltd. (Tokyo)
Year of publication: 1997

Buddhist
Economics: The Emerging Middle Path between Capitalism and Socialism

Shinichi
Inoue, a former President of the Japanese Miyazaki Bank and reputed
economist, has proposed a novel approach to economic management that
goes beyond socialism and capitalism. He calls his proposed economics
for the 21st century 'Buddhist Economics', a phrase first used in
print by Dr. E.F.Schumacher in 1973 in his best-selling book "
Small is Beautiful ".

Based
on the insight of the Buddha that spiritual liberation is attained
by avoiding extremes, whether by indulgence in worldly pleasures or
severe asceticism, and treading namely ' the Middle Way ', Inoue recommends
'Buddhist Economics ' as the ideal middle path between the competing
models of capitalism and socialism. Both these systems, Inoue argues,
have failed to contain the relentless destruction of the natural environment
and the human community, thereby forcing leading executives and planners
to search for new solutions for planetary problems.

Inoue
draws on the best aspects of both capitalist and socialist economic
systems, in his ' Buddhist Economics ' model. It supports the conventional
forces of a free market and competition without destroying either
nature or human society. His alternate vision of sustainable economics
is meant to be more just and more ecologically sound.

Inspired
by the fundamental Buddhist insight of the inter-connectedness existing
among all living things, Inoue says that Buddhism, Economics and Ecology
are all inter-related. He places a heavy emphasis on the concept of
freedom as understood in Buddhism in contrast to the Western concept
of 'freedom'. In the West 'freedom' revolves around the rights of
the individual i.e. freedom to do what one wishes. In Buddhism, 'freedom'
means freedom from personal desires or attachments.

In
Inoue's view, a Buddhist approach to economics requires an understanding
that economics and a moral and spiritual life are neither separate
nor mutually exclusive. The 20th Century has been ravaged by a materialistic,
self-centered consumerism. The next century needs to focus on the
quality and spirituality of life itself. Buddhism, which advocates
the 'Middle Path', serves as an important resource to pursue an alternative
to the extremes of capitalism and socialism, or pure self-interest
and utter self-negation.

The
Essence of Buddhist Economics

Inoue
identifies three key phrases that underlie his model of Buddhist Economics.

They are:

1)
an economics that benefits oneself and others
2) an economics of tolerance and peace
3) an economics that can save the earth.

An
Economics that benefits oneself and others

Adam
Smith developed his theory of free enterprise based on the concept
of self-benefit'. This led to people being more concerned with enriching
themselves and disregarding the interests of others. At the international
level, during Adam Smith's day, major colonial powers such as England,
Netherlands, France, Portugal and Spain developed their economies
from the resources taken from other poorer regions, without an adequate
resulting benefit accruing to the colonies. In contrast, the earlier
Buddhist societies such as India during the time of the Buddha or
Japan during
the time of Prince Shotuku ( 574 - 622 AD ) existed with a radically
different social approach. In Japanese society where the density of
population was high, human relations were tightly interwoven, and
Japanese people were encouraged to pay great attention to how other
people thought or reacted. In the Japanese world of business, earning
the trust of others and entering into mutually beneficial transactions
have always been given priority. Such conduct was the result of
deep-seated Buddhist influence.

The
Western obsession with 'self-benefit ' and indifference to the rights
of non-European people has been well analysed by former Indian diplomat
K.M.Panikkar in his ground breaking book 'Asia and Western Domination
- A Survey of the Vasco De Gama Epoch of Asian History 1498 - 1945,
published in 1953. Panikkar says that western colonial powers were
reluctant to recognise that doctrines of international law applied
outside Europe or that European nations had any moral obligations
when dealing with Asian people. For example, when Britain insisted
on the opium trade against the laws of China in the 19th Century,
there was a prohibition by law on opium smoking in England. In countries
under direct British occupation eg. India, Ceylon and Burma, though
there were equal rights established by law, there was considerable
reservation in enforcing the law against Europeans. Maurice Collis,
a British magistrate in Burma, gives a rare candid account in his
book 'Trials in Burma' ( 1938 ) about the pressures brought upon him
by the members of the Colonial Government and the British expatriate
community, to be partial towards Europeans in his judgments. Panikkar
avers that this doctrine of different rights (which made a mockery
of the concept of the Rule of Law) persisted to the very end of western
colonial domination and was a prime cause of Europe's ultimate failure
in Asia.

An
Economics of Tolerance and Peace

The
Indian Emperor Asoka established the world's first welfare state in
the third century BC upon embracing Buddhism. He renounced the idea
of conquest by the sword. In contrast to the western concept of '
Rule of Law ', Asoka embarked upon a 'policy of piety or rule of righteousness'.
The basic assumption of this policy of piety was that the ruler who
serves as a moral model would be more effective than one who rules
purely by strict law enforcement. The right method of governing is
not only by legislation and law enforcement, but also by promoting
the moral education of the people. Asoka began by issuing edicts concerning
the ideas and practice of dharma, dealing with universal law and social
order. Realizing that poverty eroded the social fabric, one of his
first acts was to fund social welfare and other public projects. Asoka's
ideals involved promoting policies for the benefit of everyone in
society, treating all his subjects as if they were his children and
protecting religion. He built hospitals, animal welfare shelters and
enforced a ban on owning slaves and killing. He gave recognition to
animal rights in a number of his rock edicts and accepted state responsibility
for the protection of animals. Animal sacrifice was forbidden by law.

An
important aspect of Asoka's economics of peace was tolerance. In one
of his rock edicts, Asoka calls for religious freedom and tolerance,
and declares that by respecting someone else's religion, one brings
credit to one's own religion. Inoue says that the idea of religious
tolerance only emerged in the West in 1689 with the publication of
John Locke's book ' A Letter Concerning Toleration '.

Inoue
says that from a Buddhist perspective, politics can be summed up by
the Sanskrit word 4 cakravartin ' (the wheel turner ), which means
a king or political ruler who protects his people and the Buddhist
teachings. Asoka was the prototype of this ruler whose political ideas
were to inspire a countless number of other Asian Emperors and rulers.
One enthusiastic follower of Asoka in Japan was Prince Shotuku. (574
- 622 AD ). An ardent believer in Buddhism, Shotukti drafted a 17
Article Constitution (the first Buddhist Constitution of Japan), which
was promulgated in 604 AD. Shotuku appeals neither to 'self-evident
truths ' (as in the American Constitution ) nor to some divine right
of kings as the basis of law. Instead he begins pragmatically by stating
that if society is to work efficiently for the good of all, then people
must restrain factionalism and learn to work together. A key feature
of this Constitution is the emphasis placed on resolving differences
by appeals to harmony and common good, using the procedure of consensus.
This approach is in marked contrast to the western view that factions
can be controlled only legally by a balance of powers. Decision making
by consensus is a significant characteristic of Japanese society.
Every effort is made to ensure that minority dissident factions are
not allowed to lose face.

The
influence of Buddhism in Japan was such that in 792 AD Emperor Kammu
(781 - 806 AD) despite constant threats from Korea, abolished the
100 year old national army, except for one regiment to guard the region
near Korea. National security was maintained by sons of local clan
leaders somewhat similar to the present day police. Japan was effectively
without an army until the emergence of the new warrior class before
the Kamakura, Shogunate (1192 - 1333 AD). Tibet is another example
of demilitarisation (in the 17th century). What is significant to
note here is that long before the ideal of demilitarisation was espoused
in western countries, ancient Buddhist countries had already implemented
it. In Japan, beginning from the 9th century, the death penalty was
abolished for nearly three and a half centuries.

An
Economics to save the Earth

Inoue
is vehemently critical of the practice of industrial societies indulging
in a policy of take-and-take from nature, despite economics being
fundamentally about exchange or give-and-take. He identifies a passage
in the Bible (Genesis 1: 27 - 28) as a possible root cause of the
western attitude towards nature. This passage declares:

"So
God created man in his own image, in the image created he him, male
and female created he them. And God blessed them, and God said unto
them, "Be fruitful and multiply, and replenish the earth and
subdue it, and have dominion over the fish of the sea, and over the
fowl of the air, and over every living thing that moveth upon the
earth".

Some
have interpreted this passage literally, as one giving divine sanction
to domination of the earth for the benefit of only human beings and
disregarding the interests of both plants and other living creatures
of this world. In contrast, Buddhist sacred texts are much more humble
and always emphasise the need to live in harmony with nature and peacefully
co-exist with other living creatures, as the ideal and noble way.
In the Buddhist worldview, humans rather being masters of this earth,
simply make up one tiny element in a vast cosmos. In the Buddhist
Economics that Inoue proposes, the earth rather than human beings
will be placed at the center of our worldview.

History
of Economics

Inoue
examines the major ideas in the theories of prominent economists such
as Adam Smith (1723 - 1790), David Ricardo (1772 - 1823), Karl, Marx
(1818 - 1883), John Keynes (1883 - 1946) Joan Robinson (1903 - 1983)
and the German Economists Friedrich von Hayek (1899 - 1992), Wilhelm
Lopke (1899 - 1966) and Ludwig Erhard (1897 - 1977). Inoue singles
out Lopke's best-selling book ' Civitas Humanas (Human Citizen) published
in 1949 as laying the foundation for the new humanistic school of
economics. Inoue uses the concept of `social market economics' advocated
by Ludwig Erhard in his 1957 book 'Woffistand fur Alles (Happiness
for All ) as the precedent for developing the new Buddhist Economics.
Erhard called for the need to overcome the inherent tensions between
the haves and have-nots in society, through such governmental policies
as the banning of cartels, using government 'price valuation' to ensure
fair pricing, rent control and supporting people with disabilities.

Inoue
was also inspired by Dr. E.F Schumacher's book 'Small is Beautiful',
which has a chapter on 'Buddhist Economics.' Schumacher was heavily
influenced by Buddhist meditation and wisdom during his time in Myanmar
(formerly Burma). Though Schumacher recommended a new approach to
economics based on Buddhism, Inoue says that Schumacher's ultimate
solutions were sought in Christian oriented ethics. Nevertheless,
Inoue says that Schumacher's book should serve as a wake up call for
those living in Buddhist countries. He further says that given the
destruction of the natural environment that has taken place in the
industrial West, the time has come to use a Buddhist approach to economics.

Historical
Background of Buddhist Economics

The
life story of the Buddha offers a valuable lesson when focusing on
Buddhist economics. Prince Siddhartha rejected the material comforts
of a royal life, and also realised the futility of asceticism and
denial of natural physical needs. Inoue says ''The Buddha walked a
fine line between materialism and denial of the world, and this middle
way or moderate standpoint is fundamental to understanding Buddhist
Economics'.

The
ordinary public and the merchant class supported Buddhism from the
very outset. As Buddhism moved eastwards over the centuries, to China,
Korea and Japan it absorbed elements of the culture of these countries
and became transformed along the way. It also managed to transform
the societies and economies of these countries by introducing ethical
concepts into the pursuit of profit. In Japanese history there has
been substantial Buddhist support of commerce, which had come to fruition
during the Edo period (1603 - 1867). This period witnessed an explosion
of economic activity. Some sociologists have found interesting parallels
in the connections between the Protestant work ethic and capitalism,
and between the rise of Japanese Capitalism and the religious thought
of the time.

Unrestrained
Consumption

The
world's natural resources would be depleted if two factors are not
immediately addressed:

1)
the ever increasing population growth, and
2) the mismanagement of desire ( particularly of those people in the
so-called advanced countries)

In
the Ryoan-ji, the Buddhist Temple of Kyoto, famous for its stone and
sand garden, there is a poem carved on a stone, which says ' Know
what one really needs '. Inoue says that this is no simple injunction.
To know what one really needs in life requires great wisdom. But to
have the strength to say 'no' to the unessential products in life
would release a person from the coils of consumption. Inoue says that
this view i.e. of wanting what is really essential reflects the Buddhist
view of consumption and it is the ideal attitude to be promoted in
the coming century.

Right
Livelihood

Right
livelihood is one of the components of the Noble Eightfold Path. Its
importance lies in the fact that the work one does for a living influences
a person's thinking. The Buddha has named five types of occupations
as unwholesome ways of earning a living. They are 1) Selling liqour
or being connected with the production and sale of liquor 2) Sale
of flesh or being connected with the raising and killing of animals
3) Poison (includes drugs) 4) Trading in living beings (includes slavery
or for similar purposes) 5) Dangerous weapons.

Inoue
uses the 'Sigalovada Sutta ' (which is also called the layman's code
of discipline or gihi vinaya ) as the premise for developing the right
work ethic for the next century. In one passage of this Sutta, the
Buddha says "One should work like a bee to earn one's livelihood.
Do not wait for others to help, nor depend on others foolishly".
In the Sigalovada Sutta, the Buddha showed his concern for the material
welfare and the spiritual development of his lay disciples. In the
discourse to young Sigala, the Buddha explained the full range of
duties owed by a layman to all those with whom he interacts. The Buddha
also indicated how wealth has to be spent i.e. one portion for one's
needs, which includes offerings to monks and charity, two portions
on investment and the fourth portion to be kept for an emergency.

The
Author

Inoue
was born in 1918 in Southern Japan. Upon graduating from the Department
of Economics of the University of Tokyo, he joined the Bank of Japan.
In 1975 he was made the President of the Miyazaki Bank. Throughout
his career Inoue has sought to combine the practice of Buddhism with
his expertise in Economics and Management. He is the current Chairman
of the Foundation for the Promotion of Buddhism, and a member of the
Buddhist Economics Research Institute of Komazawa University.

In
the concluding chapters of this book, Inoue illustrates his creative
approach to business with a number of anecdotes of leading Japanese
entrepreneurs who had incorporated Buddhist principles and meditation
techniques in their day to day work in an effort to develop a more
humanistic and environmentalist business ethic.

Buddhist
Economic Vision

Though
much of the postulates of Inoue have been developed in a Japanese
Mahayana Buddhist context, the contents of this book nevertheless
provide food for thought to anyone wishing to adopt an innovative
approach to Management and Business. However the greatest appeal of
this highly readable book lies in the elaborate development of Schumacher's
profound insight that there is another way of approaching economics,
based on the ideas taught in the East 2500 years ago, particularly
of the fundamental interconnectedness of people and nature. It is
upon this premise that the world can shift from a throw-away culture
to a more sustainable* civilisation. This work also throws a challenge
to governments in Buddhist countries to develop a Buddhist economic
vision as a part of national planning, as we move towards a new millennium.